Sydney was thrown into chaos Thursday after the city's heaviest rainfall in five years sparked widespread flash flooding and forced the closure of railway lines and dozens of roads.

Large tracts of Australia's most populous state New South Wales are under water, with Sydney feeling the force of a La Nina weather system as an estimated 119 millimetres (4.7 inches) of rain fell on the city -- the highest daily total since 2007.

"There has been very, very heavy rain and some very strong winds," a Bureau of Meteorology spokesman said. La Nina conditions typically bring higher-than-normal rainfall.

The downpour sparked extensive flash flooding, caused havoc with bus timetables, road and rail transport and prompted power cuts to at least 2,000 homes.

Several flights from Sydney were delayed or cancelled while there were fears that hundreds of boats on Sydney Harbour could sink after filling up with rainwater, NSW Maritime officials said.

"We've had a hell of a rain event," NSW roads minister Duncan Gay told reporters. "It is a weather event the likes of which many of us have never seen before. It's that one-in-a-hundred year event that you hear of."

Reports said authorities had been called out to more than 1,000 incidents in the city, with overflowing rivers and canals engulfing cars and homes in suburban Sydney. A savage windstorm in the city's east also tore bricks and tiles from homes.

Further inland, the town of Forbes, was cut in three by flooding with some 1,000 people ordered to leave their homes as the Lachlan River continued to rise.

"We're totally surrounded in the CBD by water," Forbes mayor Phyllis Miller told national broadcaster ABC.

Heavy rain and flooding has hit three eastern states throughout the week, sweeping two men to their deaths after they attempted to cross waterways in cars, inundating hundreds of homes and causing millions of dollars in damage.

A police officer was lucky to escape with his life after falling down a mountainside Thursday when the ground beneath him gave way as he worked on a fallen tree in the NSW Southern Highlands.

He plunged some 30 metres (100 feet) before his fall was broken by vines and he was taken to hospital in a stable condition.

"The rain and the flooding continues and there is hardly an area of NSW that has not been affected at some point," NSW emergency services minister Michael Gallacher said.

Parts of rural Victoria state are also struggling, with residents from the northern town of Nathalia evacuated as floodwaters threatened to breach both its main levees.

Australian Treasurer Wayne Swan said it was too early to establish the cost of the floods, although some estimates have put it as high as Aus$1 billion ($1.05 billion).

But Swan expects there will be a significant impact on the New South Wales agriculture sector.

"It's far too early to tell what the economic cost of these floods will be. Many parts of the state (NSW) are still under water," he told ABC radio.

"We won't know the damage to the public infrastructure. We won't know the damage to the private infrastructure. So what we've got to do is assess that as quickly as we can and make sure we get help to those most in need."

Floods in eastern Australia last year that claimed more than 30 lives and left damage bills of some Aus$6 billion.